How a Pandemic Refocused the Way We Live and How Homebuyers Shop
The precautions that came with a global pandemic prompted Americans to see home in a different light. Reevaluating where and how we live took on a new urgency when suddenly we were not spending a third of our lives elsewhere. What we do and where we do it just looks different today, and the impact extends to nearly every aspect of homebuying.
To start with the elements that are close at hand, that third bedroom has long been storage or home-office space, because the size of American families has been shrinking for a couple of generations. Today, that former bedroom is becoming more capable, as working from home got to be the norm for millions – and for many, it is likely to stay that way. Even big-city apartment closet space, considered scarce already, has been pressed into service as everything from office to recording studio in response to pandemic precautions.
The temporary nature of adaptations like these is looking a lot less temporary for many. As a result, millions are questioning the layout and capacity of their homes, and millions more are questioning where that home is located.
How the New Became Normal
It is estimated that the number of people working from home will double, even after pandemic precautions are relieved. Since early in the pandemic, the question of what will stay on has been a key topic on both personal and career levels. Professionals who were gradually adapting to collaborating online were plunged further into it as the only option. Having lived with that outlook for almost a year, many firms are restructuring to keep remote teamwork centerstage. Savings in office overhead and actual improvements in some forms of productivity are making it very attractive to carry on as we are, for many kinds of companies.
And the feeling is mutual. A survey of 4,700 knowledge-based workers reports that only 12% want to return to full-time office work, and 72% prefer a hybrid-remote office model. Suddenly, “commuting distance” is a shrinking issue, as people see a freer hand in choosing where they live. “Pandemic migration” away from cities appears to be overstated, but nevertheless it has accelerated to some extent as a response to this recognition, that if we’re collaborating online, then we might as well be doing it from the location of our dreams. “Why wait?” is a question, too, that comes to the top from a new realization of the importance of every day, as well as from the change in how we work.
How Homebuyers Shop Today
Although two months of recent data suggest a near-term decline in overall desire to own one’s home, first-time homebuyers still represented 31% of all homes sold in 2020, down only 2%. Real estate transactions surged and selling prices rose above-asking in market after market. Low interest rates and the reassessment of life goals in response to the pandemic brought with them noticeable changes in buyer behavior, including higher prices paid, a greater popularity of suburban homes with more living space, and an interest in remaining in those homes for fewer years. Paradoxically, multi-generational homes rose in popularity, shortly after the onset of the pandemic.
The way home searches are conducted and transactions brought to completion have surprisingly not seen changes that one would classify as greatly accelerated trends. Still, the National Association of Realtors’ annual profile of buyers and sellers for 2020 reports that the share of homebuyers who used the Internet in their search reached an all-time high of 97%. The typical search took eight weeks and included a median of nine homes, five of which were viewed only online.
The observations we might make – that are not just existing trends magnified – are that homebuying and home prices accelerated during an economic downturn for two reasons beyond low interest rates. The resources of a digital world and the business and personal reassessments the pandemic brought with it combined to produce a result that straight-line projections might never have anticipated.